Govt to soon come up with rules for direct listing of Indian companies abroad

economictimes.indiatimes.com:

finance and corporate affairs are at an advanced stage of firming up a much-awaited framework for direct listing of Indian companies abroad, which could be introduced later this financial year, said people with knowledge of the matter.

The move would set the stage for unicorns and other entities to have easier access to a larger pool of foreign capital, they said, adding that it could also encourage a greater number of startups, with Indians at the helm, to incorporate within the country instead of jurisdictions like Singapore.

Initially, the framework will be used to allow direct listing at the International Financial Services Centre (IFSC) at Gujarat's GIFT City. Subsequently, it will govern listings in other jurisdictions as and when the government decides to allow that, the people told ET.

«The capital markets division of the Department of Economic Affairs (DEA) and the Ministry of Corporate Affairs (MCA) are firming up rules that will act as an enabler of the direct listing process.

The broad framework will govern future listings in all international jurisdictions and not just in the IFSC,» said one of the persons, who did not wish to be identified.



Several options, including mandating a secondary listing for domestic companies on Indian bourses within a stipulated time frame after they list abroad, are being considered as part of the framework, the person said. This would assuage fears of less oversight of such entities by Indian regulators, he added.

Extant rules bar Indian firms from listing overseas directly.

They are allowed to access overseas equity markets only through depository receipts, such as the American Depository Receipts and Global Depository Receipts, after they go public in India. They can